Money can't be accepted once booking annulled

The Rajasthan State Commission highlighted that the Board had received payment before it had sent the reminders, and it had no proof of having served a cancellation notice

On December 29, 2004, Devendra Kumar applied to the Rajasthan Housing Board for a house under the Gharonda Scheme. Along with his application, he paid the required fee of Rs 2,500. However, he delayed the subsequent payment of Rs 3,000 for the seed money by a month. The Board issued an allotment letter for a house in Alwar on May 27, 2005. It instructed Devendra to deposit an additional Rs 8,533 within a month. Since Devendra could not afford the entire amount, he initially deposited only Rs 4,000.

Upon coming across a press notice declaring that his house would be auctioned, Devendra paid another instalment of Rs 4,000. He also lodged a consumer complaint with the Jodhpur District Commission.

The Board contested the complaint. It claimed that it had issued several reminders to Devendra to pay the outstanding amount. After a reminder sent on August 4, 2006, Devendra had only paid Rs 4,000. Therefore, a fresh notice was issued on August 26, 2006, warning him that the allotment would be cancelled if he failed to pay the balance amount. 

Despite three reminders and a warning that the allotment would be cancelled, Devendra had failed to comply. Therefore, the Board said it cancelled the allotment on October 18, 2006.

The District Commission agreed with the board, ruling that the cancellation was justified due to Devendra’s failure to make timely payments. It, therefore, dismissed his complaint.

Devendra, however, appealed against this order. The Rajasthan State Commission pointed out several anomalies in the Board’s defence. It noted that Devendra had made the initial registration payment on time, whereas the seed money was paid after a delay of one month. The Commission also highlighted that while the Board had claimed that it had sent three reminders for payment, the fact was that it had already received the payment from Devendra on August 25, 2006 — a day prior to the second reminder.

Besides, even though Devendra had disputed receipt of the cancellation notice, the Board had failed to produce any document to show that the notice had been sent and served to Devendra. Moreover, the amount that was refundable upon cancellation had not been returned to Devendra. And most significantly, the Board had accepted payment even after the purported date of cancellation.

The State Commission overruled the claim of the complaint being time-barred. It reasoned that the Board’s failure to provide proof of the cancellation notice being served and the acceptance of payment after the purported cancellation date meant the complaint fell within the time limitation. The Commission concluded that the Board had exhibited deficiency in service.

The Commission further observed that even if it was assumed that the instalment was wrongly accepted by an employee of the Board in collusion with Devendra, the Board would still be liable and responsible for the act of its employee.

Since the house had not been allotted to anyone else, the State Commission ordered the Board to accept the remaining instalments, along with a penalty for late payment, and thereafter transfer possession of the house to Devendra.

The Board contested this order in revision. The National Commission observed that the order of the State Commission was well reasoned. Accordingly, by its order of June 22, 2023, delivered by Subhash Chandra, the National Commission dismissed the Board’s revision and upheld the State Commission’s order in favour of Devendra.

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The writer is a consumer activist